The UK’s big five banks continue to invest heavily in industries that are implicated in man made climate change.
Photograph: Paul Souders/Corbis

Is your current account with one of the big five banks: Lloyds, Barclays, HSBC, RBS/NatWest or Santander? If so, you are helping to support the more than £66bn they have lent to companies around the world engaged in oil and gas extraction. But individuals- who are concerned about climate change can move their money to banks and financial institutions that offer fossil-free alternatives.

The scale of support provided by mainstream banks across the world for the coal, oil and gas industry is breathtaking – and it is British banks that are among the biggest lenders. An analysis of Europe’s 20 largest banks in 2014 found that Barclays had the highest volume of “high carbon” loans, as a proportion of its total lending, of any of the banks, while Lloyds had the highest amount invested in high-carbon equities.

“The five biggest banks in the UK are also the five biggest investors in climate change,” says campaign group MoveYourMoney.org.uk.

It also analysed how much the major banks are financing controversial fracking operations. HSBC provides services to Cuadrilla; Barclays handles banking for IGas Energy, the company with the most oil and gas exploration licences in the UK; while Lloyds loaned £10m to Alkane Energy.

But what can individuals concerned about climate change do? Are there fossil fuel-free alternatives? The good news is that switching is now easier than ever – and high-quality accounts are easily accessible.

How to get your pension fund to divest from fossil fuels

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MoveYourMoney has prepared an action plan.

Write to your bank: and pledge to divestCampaigners say it makes no sense to switch current accounts without first letting your bank know and asking them to change direction. If you simply switch without writing, the bank may think it is because of poor service, or that you’ve been enticed by another bank’s offer.

To help, MoveYourMoney has produced a template letter that individuals can send before switching. Separately formatted for each of the major banks, so it gets to the right department, the template highlights the vital role banks play in funding energy projects.

It asks the bank to disclose, in full, all its investments in the fossil fuel industry, and commit to a five-to-10-year plan to completely divest from fossil fuels. The letter is a plea to the bank to engage in good corporate behaviour, and highlights the fantastic opportunities for a better future. But it comes with a warning that if the bank declines to change, the individuals named will have no choice but to move accounts.

Switch to fossil fuel-free: the three alternativesMoveYourMoney names three banks as viable alternatives for your cash – Triodos Bank, Charity Bank and Co-operative Bank, although only the Co-op offers a mainstream current account (Triodos is planning to launch one next year). The Co-op, despite its financial travails of recent years, is still the only major bank committed to fighting climate change.

It says: “We will not provide banking services to any business or organisation whose core activity contributes to global climate change, via the extraction or production of fossil fuels (oil, coal, gas and shale gas), with an extension to the distribution of those fuels that have a higher global warming impact (for example, tar sands and certain biofuels).”

We are positioning ourselves as the ‘yes’ bank. It’s about making investments that are good for society

Triodos Bank

The policy was revised in January this year to explicitly add shale gas and fracking after the bank polled 74,000 customers. The Co-op Bank is also offering one of the best incentive packages for switchers: £100 to you, plus £25 to charity.

Switching accounts has become virtually- hassle-free since the introduction of the “seven-day switching” scheme, backed by a guarantee which makes the whole process simple and reliable.

Tell others: and join the Keep it in the ground campaignMoveYourMoney recommends that current account holders share the letter to their bank across social media such as Facebook.

The Guardian’s Keep it in the ground campaign, calling on the world’s two largest charitable foundations to move their investments out of fossil fuel companies, has already amassed more than 200,000 supporters.

Launched by the newspaper’s editor-in-chief, Alan Rusbridger, in partnership with the global climate -movement 350.org, it is urging the Wellcome Trust and the Bill & Melinda Gates Foundation to divest from the top 200 oil, coal and gas companies within five years.

The bigger picture: move your savings accountsMoving your current account is one thing, but a bigger (and more positive) impact can come from shifting your savings- from banks that support fossil fuels to financial institutions that are aiming to build a more sustainable global economy.

Triodos Bank promises that it is 100% ethical, saying it is “only lending money to people and organisations making a positive impact – culturally, socially and environmentally”.

It offers a range of ethical savings accounts including a Junior Isa for children paying 2%, a three-year fixed-rate cash Isa paying 1.8%, and an easy-access online savings account paying 1%.

Meanwhile, the West Yorkshire-based Ecology building society has an easy-access account paying 1%, a 90-day notice account paying up to 1.5%, and a regular savings account paying 1.75%.

The Co-op also has a wide range of savings accounts where you can be sure the money won’t go to support fossil fuel extraction. Its two-year fixed-rate bond pays 1.4%, and its three-year bond pays 1.7%.

These rates will appear low, but they are no worse than the mainstream banks and, in some cases, better. For example, Lloyds Bank only pays 1.4% on its three-year savings bond, while NatWest’s two-year bond pays 1.35%. In other words, divestment is virtually cost free, as you will still earn the same sorts of interest rate whether you move banks or not.

Also, don’t forget credit unions and building societies. Few have explicit policies which exclude fossil fuel investment, but since they are largely engaged in mortgages or personal loans, they have little connection to the oil, gas and coal industries.

Investments: consider going ‘darkest green’Green and ethical funds have been around for decades, but unfortunately few are entirely fossil free, with many preferring an “engagement” strategy rather than outright divestment.

The fund known in the industry for being the “darkest green”, and which prohibits investment in fossil fuels, is Jupiter Ecology, run by Charlie Thomas.

It is a £460m fund invested in around 70 companies that the manager expects to make money for his investors, as well as help shift the global economy on to a more sustainable basis. It invests in renewable energy, recycling, waste management, companies engaged in tackling water scarcity, and public transport initiatives.

Since Thomas took over the fund in 2003 it has outperformed the average globally invested fund by around 40%, although over the past year it mildly underperformed. Minimum investment is £500, and it is available as a mainstream fund across all the major investment platforms in the UK, such as those run by Hargreaves Lansdown and Fidelity.

Triodos Bank also has a range of investment funds that avoid fossil fuels. Head of socially responsible investing, Eric Holterhues, says: “We are positioning ourselves as the ‘yes’ bank. It’s not about saying what you can’t do – but about investments that are good for society.”

It has 17 funds, from the broad-based that will include many global multinationals but exclude coal, oil and gas, through to specialist portfolios such as its Arts and Culture fund.

Voting to switch

Chelsea Edwards switched her account from Barclays to the Co-op because of Barclays’ fossil fuel investments. Photograph: Linda Nylind for the Guardian

Last December Chelsea Edwards put her bank, Barclays, on notice that she would quit as a customer unless it promised to begin divestment from fossil fuels. This month, having received no promises from the bank, she switched her current account to the Co-operative Bank.

“I’ve just switched. I feel that it’s like having a vote about where you want to put your money. Too many people allow others to vote on their behalf. I voted in the way I wanted to for the environment; I see it as a moral obligation to act on the science of climate change.”

The switch has taken place smoothly, with all her payments and direct debits transferring seamlessly. “I went to the Co-op because they don’t invest in fossil fuels and have a good ethical policy. I see divestment not just as a moral issue, but one that also makes financial sense.”

Edwards, an editor from Brentford, west London, is also examining what pressure she can now bring on her pension fund provider to divest from fossil fuels.